Voluntary Deductible in Two Wheeler Insurance

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Voluntary Deductible in Two Wheeler Insurance

Understanding the nuances of two-wheeler insurance is essential for every rider, and one key aspect to consider is the voluntary deductible. This element of your insurance policy can significantly impact both your premium and coverage.

Making informed decisions about your voluntary deductible can lead to substantial savings and tailored protection that suits your needs.

This guide will explore the benefits, considerations and strategies for choosing the right voluntary deductible discount for your two-wheeler insurance.

Read on!

Voluntary Deductible Meaning

Before understanding the concept of voluntary deductible, you should understand what a deductible in insurance for a 2-wheeler is.

An insurance deductible is the amount you pay out-of-pocket before Tata AIG covers the rest of your claim. You only pay this when you file a claim. When choosing an insurance plan for your bike, always consider the deductible amount and what the policy covers.

So, a voluntary deductible is an optional amount you choose to pay out-of-pocket for bike repairs in addition to the mandatory deductible. By opting for a voluntary deductible, you can lower your insurance premium.

The higher the voluntary deductible, the more you save on your premium, but you will have higher out-of-pocket expenses if you need to file a claim.

For instance, if you choose a voluntary deductible of ₹2,500, your annual premium might be ₹3,500 instead of ₹4,500 without the voluntary deductible. If your bike repair costs ₹12,000 after an accident, you pay the ₹2,500 voluntary deductible plus the compulsory deductible and your insurer covers the rest according to your policy limits.

Also Read: What IDV Means in Bike Insurance

Rate of Voluntary Deductible in Bike Insurance Premium

The cost of your bike insurance premium depends on both third-party coverage and coverage for damage to your vehicle. Third-party insurance covers liabilities to others, while Own Damage (OD) cover takes care of your bike's damages.

Here is a table that shows how the discount on your OD premium varies with the voluntary deductible amount.

Voluntary Deductible Amount Rate of Discount
₹2,500 20% and a maximum of ₹750
₹5,000 25% and a maximum of ₹1,500
₹7,500 30% and a maximum of ₹2,000
₹15,000 35% and a maximum of ₹2,500

A Few Things to Know About Voluntary Deductible in Insurance Plans

Pay Only When You Claim: You only need to pay the voluntary deductible if you file a claim. This amount is due only after your claim is approved. Once approved, you will pay both the voluntary and compulsory deductibles at the repair shop, while Tata AIG will cover the remaining costs as per the policy limits.

Compulsory Deductible Still Applies: Opting for a voluntary deductible does not eliminate the compulsory deductible. During a claim, you must pay both deductibles.

Different from Copay: A voluntary deductible is a fixed amount you choose to pay, while a copay is a percentage of the claim amount, typically associated with health insurance. Tata AIG will only pay the claim if repair costs exceed the total deductibles.

Suitability: A voluntary deductible can save money for riders who rarely file claims. However, it may not be advantageous for those who ride in high-risk areas or frequently make claims.

A Few Misconceptions Regarding Voluntary Deductibles in Bike Insurance Policy

You Pay the Voluntary Deductible with the Premium: Many people mistakenly believe that they need to pay the voluntary deductible when they pay their insurance premium. This is not true. The voluntary deductible is only paid if you make a claim. If no claim is made, you still receive the premium discount without paying any extra amount.

Higher Deductible is Always Better: While opting for a higher deductible can lower your premium, it also increases your financial risk. If you do not make a claim, it can save you money. However, if you need to file a claim, the high out-of-pocket costs can be overwhelming.

Compulsory and Voluntary Deductibles are the Same: Compulsory and voluntary deductibles are different. The compulsory deductible is mandatory and must be paid in the event of a claim. The voluntary deductible, on the other hand, is optional and chosen by the policyholder to potentially lower the premium.

Conclusion

A voluntary deductible in two-wheeler insurance can be a smart way to reduce your premium costs. By choosing to pay a higher out-of-pocket amount in the event of a claim, you can enjoy lower regular premiums. Understanding what this means could be beneficial for you during bike insurance renewal. However, it is important to balance the potential savings with the financial risk of paying more if an accident occurs. Understanding the differences between compulsory and voluntary deductibles and considering your own riding habits and risk levels will help you make an informed decision that best suits your insurance needs.

Tata AIG offers affordable and customisable bike insurance policies. Get in touch with our customer support executives on our 24/7 Toll-Free Number, 1800-266-7780, to know more about our two-wheeler plans and also if you have queries like what IDV means in bike insurance and which add-ons you can choose.

Disclaimer / TnC

Your policy is subjected to terms and conditions & inclusions and exclusions mentioned in your policy wording. Please go through the documents carefully.

Related Articles

Can I choose a voluntary deductible when purchasing or renewing my third-party insurance policy?

Can I choose a voluntary deductible when purchasing or renewing my third-party insurance policy?

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No, you cannot select a voluntary deductible with a third-party insurance policy. This option is only available with the bike's Own Damage Cover. Therefore, you need to choose a voluntary deductible when you purchase or renew a Comprehensive Insurance Policy.

Is it better to choose a higher voluntary deductible?

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Opting for a higher voluntary deductible means you will pay more out-of-pocket if you file a claim. It is important to choose a deductible that you can comfortably afford to avoid high expenses in case of an accident.

However, if you rarely make claims, selecting a higher deductible can help you save on your insurance premium. Carefully consider your financial situation and riding habits before deciding on the deductible amount.

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